Excerpt:.....one touching the business of society -- whether dispute touches the business of society only if society is disputant -- bombay rents, hotel and lodging house rates control act (bom. lvii of 1947), section 28.;where a member of a co-operative housing society along with the society as a co-disputant flies a dispute for possession of his flat in the society's building against his occupant-licensee, the society being an effective and interested co-disputant in the case, the dispute must be held to be touching the business of the society within the meaning of section 91 of the maharashtra co-operative societies act, 1960. the ratio of the case of kalataati ramchand v. shankarrao patil (1973) 76 bom. l.r. 718 is inappalicable as held in that case itself.;a stray observation torn out of the..........party thereto.5. the division bench further indicated its difficulty in para (13) in following the ratio of kalawati's case : (1974)76bomlr718 in the following words:'.........on the other hand, if we wereto follow the bare text of section 91 notwithstanding that the finding of the officer on special duty, the dispute would be very well cognizable for eventually the reliefs claimed touch the property by the continuing member of a cooperative society. following the property of the member of a co-operative society covered by the provisions of the act should normally form the part of the cause in special remedy provided by the act itself, and upon that principle we would have been inclined to hold in favour of the respondents who raised the dispute but for the decision in kalawati's.....

Judgment:

Deshpande, C.J.

1. This petition involves a dispute as to possession of flat in the building belonging to a co-operative society. The disputants Nos. 1 and 2 are holders of the said flat as members of the said society. The same was given on leave and licence basis by them under an agreement dated 16th December, 1968 to the non-disputants. An application made by the contracting parties to make one of the licensees a nominal member of the said society, presumably to make the agreement accord with the bye-laws of the society was rejected by the society, the disputant No. 3. After the licence period expired, disputants Nos. 1 and 2 called upon the non-disputants by a notice to give back the possession of the said flat. The non-disputants did not respond. The present proceedings for possession of the flat therefore were initiated by the three disputants, the respondents herein including the society, against the non-disputants, the present petitioners, raising a dispute to that effect under Section 91 of the Act. The trial Court rejected the claim on 30th November, 1975. The respondents' appeal and the claim was allowed by the Maharashtra State Cooperative Appellate Court by its order dated 12th October, 1976. The validity of this order is challenged in this petition under Article 227 of the Constitution of India.

2. When the matter came up for hearing before a Division Bench of this Court, Mr. Sabnis, the learned Advocate appearing for the petitioners contended that though the society is impleaded in the proceedings as disputant No. 3, the society has no interest whatsoever in claiming possession from the petitioners and as such, it is merely a formal aid an idle party. The dispute essentially being between the licensors and licensees, the same was not cognizable by the authority under Section 91 of the Act, the same not being a dispute touching the business of the society, as held in the case of Kalawati Ramchand v. Shankarrao Patil, : (1974)76BOMLR718 by a Division Bench of this Court.

3. The trial Court can be said to have accepted this contention of the petitioners while rejecting the claim of the disputants. The appellate Court, however, found that the society also was claiming possession along with its members on the ground of the possession of the non-disputants being unauthorised and in breach of the bye-laws. This is how the society is shown to have been interested.

4. The Division Bench did not reverse the finding of the appellate Court. With out examining its liability to such reversal, the Division Bench appears to have assumed the 'non-interest' of the society and consequentially applicability of Kalawati's case ratio to the same. On this hypothesis the Division Bench observed in paragraph 11, that the decision in Kalawati's case that, no dispute can touch the business of the society without society itself being a disputant or co-disputant, was contrary to the wording of the Clauses (a) to (c) of Section 91 of the Act as in its opinion 'there could be cooperative dispute where the society would be non-disputant or a defending party or the society's business may be simply formal, and yet the question that may touch the business of the society may be in issue'. Clause (b) was specially cited to show how a dispute between members and members also can touch the business without the society being a party thereto.

5. The Division Bench further indicated its difficulty in Para (13) in following the ratio of Kalawati's case : (1974)76BOMLR718 in the following words:

'.........On the other hand, if we wereto follow the bare text of Section 91 notwithstanding that the finding of the Officer on Special Duty, the dispute would be very well cognizable for eventually the reliefs claimed touch the property by the continuing member of a cooperative society. Following the property of the member of a co-operative society covered by the provisions of the Act should normally form the part of the cause in special remedy provided by the Act itself, and upon that principle we would have been inclined to hold in favour of the respondents who raised the dispute but for the decision in Kalawati's case'.

6. The Division Bench, therefore, made the reference to this Full Bench in the following words:

'Whether to make a dispute touching the business of the society as cognizable under Section 91 of the Maharashtra Cooperative Societies Act, 1960, the Cooperative Society should be the disputant or a co-disputant with the member raising such a dispute?'

7. It is necessary to make it clear at the outset that the wording of the reference is very wide. The observations, quoted in paragraph 8 of the referring judgment, from Kalawati's case, : (1974)76BOMLR718 do indicate a doubt if without the society's initiative and interest, any dispute can be held to be 'touching the business of the society' at all within the contemplation of Section 91 of the Act. This doubt is based on the narrow interpretation of the said phraseology by the Supreme Court in D. M Bank's case : [1969]1SCR887 discussed earlier exhaustively. The Supreme Court itself held that the Bank's (Cooperative Society's) claim to possession of its property from tenants inducted before the Bank became its owner cannot 'touch the business' of the society (Bank) and was as such beyond the scope of Section 91 of the Act. But, these observations are the integral part of the illustrative seven point reasoning leading to the ratio of the case that a dispute between a member and his licensee by itself cannot touch the business of the society. The points are not intended to be exhaustive. A stray observation torn out of the context cannot be said to be the ratio of the case. It is not, as it could not have been, the intention to suggest, that a dispute can touch the business of the society only if it is a disputant. and not when it is a non-disputant in an identical claim. Reference to the society's being a disputant in Chandra Chetanram's case (Special Civil Application No. 1446 of 1971 decided on 16th December, 1971) is merely to emphasize the distinctive features of the case and not its being a disputant. The assumption is thus incorrect.

8. Secondly and more importantly, these observations obviously are restricted to the kind of dispute arising in Kalawati's case : (1974)76BOMLR718 (1) as to possession of a premises belonging to a co-operative society and (2) arising between the holder member of the society thereof and the actual occupant licensee. This is made clear by the words 'in the present case' of the preceding sentence, following the one, 3 portion of which is quoted in paragraph 8 of the referring judgment. Section 91 covers a variety of disputes. Theobservations do act, and cannot, be said to have been intended to, cover each and every such variety. There is no basis in the judgment to suggest to that effect. The assumption o paragraph 11 of the referring judgment to that effect is not factually correct.

9. In fact, doubts indicated in paragraph II of the referring judgment could not have been said to be baseless if the underlying assumptions were correct. The assumption that Kalawati's case, : (1974)76BOMLR718 applies to every kind of dispute is itself not correct.

10. Mr. Sabnis, the learned Advocate for the petitioners, in an anxiety to make the reference arguable, tried to show that the society is an idle and a mere formal party and as good as not being a co-disputant at all in this case. In the event of this contention of Mr. Sabnis being accepted, the dispute may turn out to be a dispute between members licensors and licensees and may attract the ratio of Kalawati's case to think at least of its being correct or not.

11. The contention, however, is without any basis and devoid of substance. No such specific plea is raised in the written statement. That by itself is fatal to the contention. The society was thus never called upon to prove that actually it was as much interested in the eviction of the petitioners as the licensors-members themselves. Any contention involving investigation of facts cannot be allowed to be raised for the first time.

12. The admissions of the Society's Secretary that (1) the application for nominal membership of the petitioners was rejected earlier and (2) that 'the usual sanction of the Managing Committee' and the authorisation for initiating the proceedings in favour of the Secretary, was not produced are of no significance whatsoever. The admissions are no doubt relied on by the trial Court. In the first place, no finding can be based on evidence on points not pleaded and put in issue. Secondly, rejection of application for membership, rather than to prove absence of interest, shows how the society is keen in having its own members in occupation of the flat. Thirdly, not filing the resolution or authorisation in the Court does not mean that actually no resolution was passed or the authorisation did not exist Reliance on the averments in paragraph 19 of the written statement asserting that dispute is between member and the petitioners are aimed to support the plea of being the tenant and not to show that the society had no interest in the possession of the flat.

13. The circumstance that the society was not a party to the leave and licence agreement or rejection of the application for making the licensee a nominal member also cannot show that the society was not interested. The circumstance that the society had not issued any notice but that the notice for eviction was issued only by the licensors is not conclusive or could have been explained had the point been pleaded. The result is that the plea of the society being an idle party raised, for the first lime, in this petition cannot be entertained.

14. Mr. Punwani, the learned Advocate, appealing for the society respondent No. 3, drew our attention to the last sentence in the second paragraph at page 1011 of the Full Bench judgment in Manohar v. Konkan Co-operative Housing Society ( : AIR1962Bom154 . He urged that the ratio in Kalawati's case : (1974)76BOMLR718 requires reconsideration as it runs counter to the ratio of the Full Bench judgment in Manohar's case, as, according to it, a dispute between a member and his licensee is triable by the Registrar or his nominee. This no doubt is so. Superficially of the contention, however, would stand exposed if it is borne in mind that the case was decided long before the Supreme Court decision in D. M. Bank's case : [1969]1SCR887 and is expressly referred to in Kalawati's case. The question as to whether such a dispute between a member and his licensee touches the business of the society or not, did not arise in the said case nor it is decided therein. In the light of the interpretation of the said wording of Section 91 of the Act by the Supreme Court in D. M. Bank's case, authority of the above observation must be held to have been shaken.

15. The result is that, the society being an effective and interested co-disputant in this case, the dispute must be held to be touching the business of the society within the meaning of Section 91 of the Act. The ratio of Kalawati's case is inapplicable as held in that case itself. The point referred does not at all arise in this case. The ratio of Kalawati's case also is not shown to be in conflictwith the ratio of any other case. The dividing line separating the situations in which any dispute does or does not touch the business of the society is very thin and is liable to be blurred by over emphasis on any of the conflicting considerations. Judicial opinion no doubt was sharply divided even before the Supreme Court decision in D. M. Bank's case : [1969]1SCR887 . The decisions to that effect are discussed in Kalawati's case : (1974)76BOMLR718 . The question has become more difficult and sensitive since the Supreme Court restricted the import of the dispute 'touching the business of the society' in D. M. Bank's case.

16. The ratio of Kalawati's case is also not shown to be in conflict with the ratio of any other case. Mr. Punwani's contention to that effect is already rejected. Paragraph 13 of the referring judgment does create an inference of its being in conflict with the said ratio though, as seen above, the point did not arise before the Division Bench. This apart, according to the Supreme Court, even a dispute raised by the society for possession of its building, for its benefit, from the tenants inducted therein by its members before the society became its owner, does not 'touch the business of society' within its concept under Section 91 of the Act. The considerations emphasized in para 13 of the referring judgment quoted in para 5 above, for suggesting a contrary view are held by the Supreme Court not to be decisive. The conflict of views indicated in paragraph 13 is no1 so much with Kalawati's case as with the Supreme Court decision in D. M. Rank's case. Till the Supreme Court reviews its ratio, the same is binding on us and is bound to restrict the scope of any review by us. Kalawati's case has merely made an attempt to reconcile the conflicting shades of opinion with the narrower view of the Supreme Court in the above case. This is not to mean that the view so expressed is infallible. Reconsideration thereof cannot be advisable unless the point specifically arises in a case and fallacies therein if any are found to be demonstrable.

17. In the second part of the paragraph 8 of the referring judgment, another portion from Kalawati's case : (1974)76BOMLR718 is quoted emphasizing the capacity of the disputant in the dispute. It is not clear why this portion isunderlined as no doubt is expressed in regard thereto in paragraph 11 or 13 or in any other part of the judgment. It is necessary to emphasize that even this part repeats what the Supreme Court has expressly held in D. M. Bank's case : [1969]1SCR887 .

18. In the result, the reference is liable to be rejected for the reasons discussed. The application fails on merits and the rule is discharged with no order as to costs.

19. On the petitioners undertaking in writing not to induct any third person in the suit premises and to vacate the same by 31st May, 1981, the order passed by us not to be executed till 31st May, 1981. The petitioners to file the undertaking within a week from today.